Question

Gross income multiplier analysis assumes that the subject and comparable properties are collecting market rents. Therefore, it is frequently argued that an income multiplier approach to valuation is most appropriate for properties with short-term leases. For which of the following property types, therefore, would we find it most appealing to use a gross-income multiplier in our analysis?A) Apartments
B) Office
C) Industrial
D) Retail

Answer 1

Answer: (A) Apartment              

Explanation:

  The apartment is one of the type of property type that helps in using the most appropriate use of the gross income multiplier on the basis of our analyzing.

The gross-income multiplier is one of the method that helps in illustrating the value of producing the overall gross property and it is also known as the capitalization method.

According to the given question, the gross income multiplier is basically used for analyzing the subjects and used for comparing the various types of properties. Therefore, Option (A) is correct answer.